Feds Will Save Lehman Because CEO Fuld On NY Fed Board

With Wall Street basically dead this week, except for the bankers trying to save Lehman (and the Goldman Sachs folks helping out MGM and the Merrill bankers poring over their UA contract looking for a way out), Andrew Ross Sorkin predicts what will happen to Lehman Brothers once everyone gets back to work after Labor Day.

It’s hard to believe that the Fed would let one of its own fail the way Bear Stearns did. Another member of club Fed, James Dimon, JPMorgan Chase’s chief executive, was handed the deal of a lifetime. Alan D. Schwartz of Bear Stearns? Not a member.

Given Mr. Fuld’s access to Fed chief Ben S. Bernanke and Mr. Bernanke’s man on Wall Street, Timothy F. Geithner, Mr. Fuld is in a much better position than his rivals to keep his firm alive. A prediction: Watch the Fed’s discount window for loans to brokerage firms. It won’t close until Mr. Fuld is out of the woods...